SJM Holdings has priced its previously announced senior notes offering, with the company entering into a Purchase Agreement with purchasers to issue US$540 million of 6.500% senior notes due 2031.
In a filing, SJM said the gross proceeds of the notes will be used to refinance the group’s existing indebtedness and for general corporate purposes. This primarily refers to US$500 million in outstanding notes due 27 January 2026.
The company added that its controlling shareholder STDM – which holds a 61.9% stake – has agreed to subscribe to a “certain amount” of the notes but did not provide any further detail. STDM previously granted a HK$2 billion loan to SJM in 2022 in the midst of the COVID-19 pandemic.
In outlining its reasoning for issuing the new senior notes, SJM said, “The Board believes that there would be significant benefit to the Company in effecting the proposed issuance and using the net proceeds for the intended purpose as it would extend the maturity profile of the Group’s indebtedness and enhance the Group’s financial flexibility.”
Moody’s last week assigned a B1 rating to SJM’s proposed notes offering – a speculative grade credit rating that signals high credit risk. In doing so, the ratings agency pointed to the company’s increased leverage in 2025 of between 8.3x and 8.7x although it expects that leverage to narrow over the coming year, driven by higher EBITDA and a modest debt reduction.
